Feeding China's Coke Habit

If only resource guzzlers like Chalco were allowed to trust markets a little more.

By

Joseph Sternberg

Jan. 30, 2013 11:27 a.m. ET

Only a month in, and already the new year brings another misadventure in Chinese resource policy. Aluminum Corp. of China Ltd., or Chalco, is up in arms over the threat of a Mongolian miner to renege on a supply contract for coking coal. Erdenes-Tavan Tolgoi says it can no longer afford to deliver the coal according to the terms of the deal, under which Chalco extended $350 million in loans in 2011. That was to be repaid in coal over several years at a price per metric ton that hasn't been publicly confirmed but is believed to be...